25 Sep 2009 18:02

Avtovaz to halve 2010-2013 investment program to 42 bln rubles

MOSCOW. Sept 25 (Interfax) - Russian carmaker Avtovaz plans to cut its 2010-2013 investment program in half, to 42 billion rubles, Avtovaz representative Alexander Shmygov said, citing company Vice President Vitaly Vilchik.

Vilchik also said that Nissan has proposed starting up assembly of Class B cars at the plant under its own brand before 2012.

Last week, the automaker announced its intentions to form a joint venture with Renault-Nissan for the production of automotive components.

It was earlier reported the AvtoVaz's investment program for 2011-2013 should have come to over 80 billion rubles. However, the company has yet to develop a similar business plan for these years, which should receive the approval of the government. Only after the presentation of the business plan would the company be able to request new loans from banks, as well as additional state support.

In addition, on Thursday, AvtoVaz for the first time released information about the dismissal of 27,600 workers from its current workforce of 102,000 persons. Earlier the company denied similar layoff figures.

It was earlier reported that AvtoVaz has made a request for state guarantee on loans in additional to an interest-free loan worth 25 billion rubles from Rostekhnologii (Russian Technologies).

At the start of September, the company's president said that AvtoVaz's bank debt comes to 42 billion rubles, excluding debt to Rostekhnologii. However, the head of the state corporation, Sergei Chemezov, when asked by journalists regarding AvtoVaz's debt, said: "it is not a very large debt. It is not critical." As of the end of the first half of 2009, AvtoVaz's short-term RAS debt came to 81.06 billion rubles. This included loans and borrowing that had increased by 33.5% since the start of the year from 39.6 billion rubles to 52.89 billion rubles. Company president Igor Komarov announced the AvtoVaz is in a pre-bankruptcy condition with losses for 2009 forecast at 35 billion rubles. He said that the main task for the company's management was to avoid bankruptcy and the sell-off of the automotive plant's assets.

The company's RAS losses for the first half of 2009 came to 14.103 billion rubles against 1.486 billion rubles in net profit in the same period of 2008. According to AvtoVaz's IFRS results for 2008, net losses came to 24.7 billion rubles against 3.7 billion rubles in profit a year earlier.